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Sharing economy thrives in land-scarce Hong Kong

In Hong Kong, space is money. The city's notoriously cramped apartments may be a bother to some, but it's a source of inspiration for the city's fast-emerging sharing economy.

Rachel Cheung, founder of startup Rent-a-Suitcase, allows customers to hire luxury suitcase brands like Rimowa and Travelmax starting from $5.80 a day, helping Hong Kongers escape the perennial issue of storage space.

"The idea came up because I needed more suitcases for a family trip but I didn't want to purchase them and store it at home," Cheung told CNBC.

Hong Kong is one of the world's most densely populated areas and even elbow space comes at a premium. The city was named the world's best-performing residential market in the past twelve months with residential prices up 20 percent, according to a September Knight Frank report.

Even shoebox apartments that span 180 square feet—the size of most U.S. parking spaces—are in demand. Known as microapartments or mosquito units, there's nothing small about their price tags, with one 180 square feet property recently selling for more than $500,000, Jones Lang LaSalle (JLL) noted this week.

That makes businesses like Rent-a-Suitcase a welcome alternative to paying for a bigger apartment.

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Cheung initially started out her business with just five suitcases one year ago and is now up to 20. Her approach is more direct compared to general rental sites like the U.K's erento.com or France's zilok.com where users typically peruse several products of varying quality before finding one they like.

So, why just luxury brands? Purely for practical reasons, Cheung says.

"Our suitcases include warranties so if they get damaged during travel, we can repair it without any cost. That's why we chose our brands very cautiously because we consider their durability."

Residential units in an apartment complex in Quarry Bay, Hong Kong
ALEX OGLE | AFP | Getty Images
Residential units in an apartment complex in Quarry Bay, Hong Kong

The sharing economy ecosystem is increasingly taking off in Hong Kong.

30 percent of the city's 1,447 internet users have participated in the sharing economy more than eight times a year, according to a recent report by the Hong Kong Internet Registration Corporation, a non-profit organization. Car sharing, crowdfunding and room/flat sharing were cited as the top three sharing activities, the report added.

With small apartments set to remain a fixture of Asia's urban landscape as land becomes more scarce according to JLL, the business of sharing is set for robust growth.

"In Asia, we have dense populations. Therefore it makes it easier to share the resources. I do think that the sharing economy only works for more valuable items like electronics and luxury goods. For less valuable items, customers are keen to purchase their own rather than rent," Cheung said.

Not just suitcases

Now that Rent-a-Suitcase has reached breakeven point, Cheung is hoping to diversify the business away from just suitcases.

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"We're planning on expanding into a more peer-to-peer (P2P) platform so consumers can have more equipment to choose from, like Go Pros and wifi devices."

For $7.70 a day, her customers can rent out GoPro's smallest and lightest camera, the Hero4 Session, including all the basic mounts and a memory card.

"Our motto is own less and travel more. So by renting your travel gear, you can spend less on purchases and spend more on experiences," she explained.

In order to fund this expansion, Cheung plans to uphold the sharing economy theme.

"Currently, I get my money from my personal savings and a bit of my family's. But for our expansion, we're planning on a crowdfunding project. We're also planning to build a traveler group to support the platform."